Telus di­als up TV ser­vice

Tele­com gi­ant joins bat­tle for bun­dled ser­vices with television of­fer­ing

Calgary Herald - - Calgarybusiness - TA­MARA GIGNAC CAL­GARY­HER­ALD

Cable and satel­lite television providers — locked in a heated bat­tle for the hearts and wal­lets of couch pota­toes — now face a new dig­i­tal en­emy in the multi-chan­nel uni­verse: the hum­ble tele­phone wire.

Telus Com­mu­ni­ca­tions is dialling in to more than 200 chan­nels and spend­ing $600 mil­lion to beef up its broad­band net­work to al­low for high-def­i­ni­tion TV in many core Cal­gary neigh­bor­hoods. Ba­sic chan­nels cost $22 and five theme packs are an ad­di­tional $25. Add a six-pack of movie chan­nels and the to­tal monthly bill comes in at about $63 a month plus tax.

There’s one caveat — you have to be a Telus high-speed In­ter­net sub­scriber.

“The phone al­lows us, with the tech­nol­ogy ad­vance­ments that have taken place in the last decade, to have a phone con­ver­sa­tion, surf the web and watch TV,” said Fred Di Bla­sio, vice-pres­i­dent of con­tent and en­hanced ser­vices for Telus.

Pro­gram­ming op­tions range from Cana­dian and U.S. favourites to spe­cialty sports, cul­ture and movies as well as chil­dren and adult en­ter­tain­ment. In­di­vid­ual chan­nels — such as BBC­Canada, MenTVor An­i­mal Planet — can be added on to any theme pack for $2 each a month.

“In our world, you get to pick and choose: You’ve got a ba­sic pack­age and you can add theme packs spe­cific to your in­ter­est, whether it’s news, en­ter- tain­ment of car­toons,” said Di Bla­sio.

Telus TV is the latest weapon in the tele­com gi­ant’s arse­nal as it bat­tles with Shaw Com­mu­ni­ca­tions over sup­ply­ing ev­ery­thing from Hol­ly­wood block­busters to In­ter­net use to home phone ser­vice.

The com­pany is no stranger to television. Sev­eral years ago, the tele­com gi­ant de­liv­ered full cable ser­vice to a se­lect group of cus­tomers in Cal­gary's Lake Bon­av­ista dis­trict. Ninety per cent of users said they wanted to keep the ser­vice, but Telus pulled the plug, cit­ing eco­nomic rea­sons.

Af­ter years of qui­etly test­ing the tech­nol­ogy with em­ploy­ees and their fam­i­lies, the tech­nol­ogy is now ready to go — and boasts a num­ber of dif­fer­ent fea­tures to stan­dard cable.

View­ers can watch a favourite pro­gram, for in­stance, while tun­ing into some­thing un­re­lated, whether it’s the latest ski con­di­tions in Banff or the hockey game.

“If I’m watch­ing Cana­dian Idol and I flip over to chan­nel one, I can still get the live lin­ear feed of what Iwas watch­ing in the up- per right hand cor­ner, but in ad­di­tion to that I can check the weather,” says Di Bla­sio. “It’s a pretty unique and interactive el­e­ment that is dis­tinct from any other provider out there.”

Cable firms like Shaw have al­ready made im­pres­sive head­way steal­ing clients from their tele­com ri­vals. In 2006, con­ven­tional res­i­den­tial lines saw their largest year-over-year de­cline since they be­gan a down­ward slide in 2001— a trend at­trib­ut­able in no small part to Shaw’s 2005 launch of dig­i­tal phone.

Both in­dus­tries are mov­ing into each other’s mar­kets, try­ing to lock in clients by sell­ing them phone, In­ter­net and TV ser­vices — a trio of prod­ucts known in in­dus­try par­lance as the “triple play.”

Both in­dus­tries are mov­ing into each other’s mar­kets, try­ing to lock in clients by sell­ing them phone, In­ter­net and TVser­vices — a trio of prod­ucts known in in­dus­try par­lance as the “triple play.”

At stake is the abil­ity to se­cure a cus­tomer’s loy­alty by act­ing as a one-stop shop for en­ter­tain­ment, sug­gests Jeff Leiper, a con­sul­tant with the tech­nol­ogy re­search firm the Yan­kee Group in Canada.

The the­ory is that by of­fer­ing mul­ti­ple ser­vices to­gether at a cheaper rate, cus­tomers will be less likely to jump to a com­peti­tor.

“It’s en­tirely about bun­dle pric­ing,” Leiper said.

“The cable com­pa­nies have been very suc­cess­ful in ramp­ing up voice sub­scribers and win­ning them away from the tel­cos be­cause when you com­bine your In­ter­net ac­cess, your television and your reg­u­lar tele­phone, you get a sig­nif­i­cant dis­count.”

Many of th­ese ser­vices — in­clud­ing wire­less phone con­nec­tiv­ity for the “quadru­ple play” — are high mar­gin prod­ucts, that when sold as a pack­age, may help Telus stem the loss of dwin­dling long-dis­tance rev­enues and home-phone de­fec­tions.

In the U.S., ma­jor tele­phone com­pa­nies like Ver­i­zon and AT&Tare in­vest­ing bil­lions of dol­lars to roll out hun­dreds of dig­i­tal TV chan­nels, broad­band Web ac­cess and In­ter­net-based phone ser­vices to the front door of cus­tomers in a bid to com­pete with cable TV providers.

In 2002, SaskTel be­came Canada’s first ma­jor car­rier — and one of the first in the world — to launch a TV of­fer­ing. Dubbed “Max” it in­cluded movie ti­tles from all the ma­jor stu­dios, 150 dig­i­tal chan­nels, 45 com­mer­cial-free mu­sic chan­nels and on­screen caller ID.

With Telus, Bell Canada, MTS All­strea­mand Aliant ea­ger to catch up to SaskTel’s early lead, the mar­ket could see ex­plo­sive growth. A study byThe SeaBoard Group sug­gests that Cana­dian tele­phone car­ri­ers could have more than 800,000 sub­scribers by the end of 2008 — or 12 per cent of the to­tal TV sub­scrip­tion mar­ket in Canada.

Such gains will be nec­es­sary if com­pa­nies like Telus are to be bet­ter po­si­tioned than cable ri­vals to de­liver th­ese ser­vices to con­sumers. Each car­rier faces its own unique set of is­sues around de­ploy­ment, whether its net­work speed or ge­o­graphic hur­dles.

In Telus’s case, crit­ics point to the fact the com­pany has yet to roll out high-def­i­ni­tion (HDTV) chan­nels — de­spite the fact that al­most half of all television sets of­fer the ca­pa­bil­ity and the tech­nol­ogy has been touted as the most in­no­va­tive ad­di­tion to television since the ad­vent of the colour screen.

HDTV is com­ing next year, Telus in­sists. Un­for­tu­nately, ar­gues Leiper, some up­scale cus­tomers will be un­will­ing to wait. “It’s a tem­po­rary dis­ad­van­tage — but it’s still a dis­ad­van­tage. I think we’re look­ing at HDTV be­ing the best-sell­ing dig­i­tal toy this Christ­mas, and that could hand­i­cap (Telus) be­cause the cable com­pany doesn’t cur­rently face the same con­straint.”

For Telus, the launch of television is part of a long-term strat­egy to of­fer the to­tal con­sumer pack­age, whether it is In­ter­net­based home se­cu­rity, cell­phone cov­er­age or broad­band web ser­vices. The idea isn’t to be cheaper than the com­pe­ti­tion — but to de­sign prod­ucts that are unique to any­thing cur­rently on the mar­ket, says Di Bla­sio.

“We try to solve prob­lems and add value to peo­ple’s lives. That doesn’t mean com­pet­ing on price, but mak­ing sure that what is of­fered is timely, rel­e­vant and fu­ture friendly.”

JEFF LEIPER, THE YAN­KEE GROUP

In 2002, SaskTel be­came Canada’s first ma­jor tele­phone car­rier to launch a TV of­fer­ing that in­cluded movie ti­tles, such as Al­fie, star­ring Jude Law, from all the ma­jor stu­dios.

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